Dissatisfied by the Government's decision to impose the requirement of showing permanent account number (PAN) card on purchase of jewellery worth Rs 1 lakh or more, All India Gems and Jewellery Trade Federation (GJF) on Monday said that this will be a discrimination against rural buyers, as they are not under tax net and do not have PAN cards.
GJF further added that this new measure by the Government is not practical and will not help to curb the generation of black money, because high import duties promote smuggling which further lead to the generation of black money in Gems and Jewellery (G&J) sector. It also urged the Government to reduce import duties on gold, silver and jewellery machineries.
"We hope that Union Finance Minister addresses the important issue of reduction of import duty on gold which has given rise to creation of parallel economy through smuggling of gold. The FY 2015 CAD/GDP ratio is presently around 0.9 per cent and is estimated to reduce to 0.3 per cent in the next year. We expect import duty reductions on gold soon. The G&J industry does not generate black money but is badly affected when Government includes industry with all black money initiatives, while the real black money generation is left open," said GJF Chairman-elect Manish Jain in a press conference.
He added that tax collection source (TCS) is applicable on bullion sales of over Rs 2 lakh and on jewellery sales of over Rs 5 lakh. The new measure of adding a further requirement of PAN card on sales of jewellery worth over Rs 1 lakh will not be helpful as around 70 per cent of buyers come from rural areas who earn non-taxable income and hence do not have PAN card.He eliminated any plans of retailers going on a strike as of now, but if things do not go on track, they will be forced to go on a strike to oppose the Government's move.